JG Summit profit soars to P5.1 billion in 2021

Iris Gonzales - The Philippine Star

MANILA, Philippines — JG Summit Holdings Inc. of the Gokongwei family reported a net income of P5.1 billion last year, buoyed by higher earnings from the property business, gains on the sale of the Oceania business of Universal Robina Corp., and the benefits of the Corporate Recovery and Tax Incentives for Enterprises Act.

This is a marked turnaround from a net loss of P468 million in 2020.

Core net income was P3. 5 billion last year.

JG Summit president and CEO Lance Gokongwei said the company is on track to full recovery.

“For the full year of 2021, the business experienced a mixed set of results. Our food and banking segments continued to be stable, while the mobility restrictions and quarantine measures still affected our real estate, specifically malls, and airline businesses. It is noteworthy though that we have seen sequential recovery quarter on quarter, as the vaccination rollout accelerated towards the second half of 2021,” he said.

Including Cebu Air’s performance, JGS’ total revenue grew by 13 percent year-on-year to P230.6 billion, as its food, real estate, petrochemicals, and banking segments benefitted from the partial reopening of the economy.

Cebu Air likewise showed strong sequential improvements quarter-on-quarter.

JG Summit also benefitted from larger contributions from its core investments in Meralco, Singapore Land Group, and PLDT.

However, there were headwinds from elevated fuel prices, high inflation, and currency depreciation.

In terms of specific business, URC reported a net income of P13.2 billion last year, up 23 percent. Including the gain on the sale of its Oceania business last year. URC’s total net income grew by 117 percent to P23.3 billion.

RLC reported a 53 percent jump in net income to P8.1 billion, driven by recovery in operations and the listing of RL Commercial REIT Inc.

Budget airline Cebu Air Inc. incurred a net loss of P24.9 billion last year on the back of higher fuel prices, maintenance-related expenses, and strong peso depreciation.

JG Summit’s petrochemicals business reported a P2.1 billion net loss, while its banking arm Robinsons Bank Corp. reported a 33 percent growth in net income to P1.2 billion due to loan expansion, stable net interest margins and better cost-to-income ratio.

Gokongwei said the company remains hopeful more relaxed alert levels will positively impact the demand for the group’s products and services.

“We are cautious though that headwinds continue to affect us with the current volatility in oil prices, rising input costs and peso devaluation. To mitigate this, we will continue to be proactive in managing pricing and product mix while simultaneously putting in place productivity initiatives across our businesses. In addition, we have recalibrated our long-term objectives, goals, strategies and measures and we are now actively implementing alignment to further enhance value creation through our ecosystem to ensure we emerge as a stronger business post-COVID and the years to come,” Gokongwei said.


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